Market Sentiment Around Loss-Making Flexion Mobile Plc (STO:FLEXM)

Flexion Mobile Plc (STO:FLEXM) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Flexion Mobile Plc operates a distribution platform for third party free-to-play games on the Android market worldwide. The kr1.1b market-cap company posted a loss in its most recent financial year of UK£2.8m and a latest trailing-twelve-month loss of UK£1.8m shrinking the gap between loss and breakeven. The most pressing concern for investors is Flexion Mobile's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

View our latest analysis for Flexion Mobile

According to the 2 industry analysts covering Flexion Mobile, the consensus is that breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of UK£500k in 2022. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 116% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Flexion Mobile given that this is a high-level summary, though, keep in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Flexion Mobile has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Flexion Mobile to cover in one brief article, but the key fundamentals for the company can all be found in one place – Flexion Mobile's company page on Simply Wall St. We've also compiled a list of key factors you should further examine:

1. Valuation: What is Flexion Mobile worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Flexion Mobile is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Flexion Mobile’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

When trading Flexion Mobile or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.